Microsoft has announced a workforce reduction impacting approximately 7,000 employees, which represents about three percent of its total workforce. This decision is not primarily driven by automation or artificial intelligence displacing jobs but rather a strategic move to optimize resources and redirect capital toward the company’s AI-focused initiatives. According to internal sources, Microsoft remains optimistic about AI’s potential to benefit people, industries, and society. CEO Satya Nadella envisions Microsoft as an ‘AI distillation factory,’ aiming to transform large-scale AI models into specialized, task-specific solutions. The company is embedding AI capabilities into core products such as Microsoft 365, Azure, and Dynamics365, targeting businesses with advanced AI tools. Wall Street has reacted positively, with Microsoft’s shares reaching their highest price of the year. Analysts suggest that further headcount reductions may occur as the company continues its substantial investments in AI-related efforts.
— new from Forbes